Auction Day 4: Setting new records in auction haul, no signs of slowing down

The first week of bidding in Industry Canada's Advanced Wireless Services (AWS) spectrum auction has produced some early surprises, particularly the decision by MTS Allstream on Day Three to give up on becoming a national wireless providers and the resolve of other WSP wannabes Shaw Communications, Vidéotron ltée and Globalive Communications. The latter three haven't shied away from going head-to-head with the Big Three wireless operators - Bell Mobility, Rogers Communications and Telus Mobility - in the non-reserved spectrum. For example, Shaw and Globalive have participated with a number of other new entrant hopefuls such as Jaguar Wireless and DAVE in bidding against the wireless ILECs on the 20 MHz A-band licence in Toronto. Jaguar is an interesting case in that it has only bid for this licence. The company is largely controlled by a numbered company 6944469 Canada Corp. with Raed Almasri listed as the primary contact. The upstart also has David Parkes in its beneficial owners list. A veteran of the Canadian telecommunications industry, Parkes has headed wireless cable company Look Communications, Sprint Canada (now part of the Rogers empire) as well as had a high ranking executive position at Rogers Wireless. It's unclear whether the company is only interested in the Toronto licence or whether it is simply bidding on the licence to retain eligibility points for a later battle. With 21 bidders remaining in the auction, there is still a lot of gaming to be done. Is Shaw really interested in non-set-aside spectrum in East on Manitoba? Perhaps, but the company isn't expected to break the bank just to get a licence in Toronto if it can't secure bandwidth in the West. The last the round of Day four's bidding saw Shaw pull back on its aggressive bidding for non-reserved spectrum. It placed an unusually higher amount of bids on set-aside spectrum than in previous rounds. This is perhaps a bit of foreshadowing regarding Shaw's exit from the race for ILEC wireless bandwidth, but as mentioned it is still early and there will be many more rounds to see Shaw's strategy evolve. Auction haul to get much biggerWith Canada's fifth spectrum auction a mere four days hold, the revenue generated for federal government coffers has exceeded many analysts' optimistic expectations of $1.56 billion. As of Friday, May 30, the total of standing high bids had surpassed the previous largest auction haul of nearly $1.5 billion in 2001. With the number of new entrants vying for a piece of the lucrative licences covering cities such as Vancouver, Calgary, Edmonton, Toronto and Montreal as well as the larger provincial regions in the non-reserved spectrum in addition to the battles going between new entrants for set-aside bandwidth, the higher populated licences are expected to increase significantly. In the 2001 spectrum auction, a 10 MHz licence covering southern Ontario licence went for as much as $344 million after 46 rounds of bidding. After 12 rounds the standing high bid for the 20 MHz A- and F-bands, which only cover Toronto and are non-reserved, are now at $152 million. In the set-aside bandwidth, the 20 MHz B-band has nearly reached $210 million, while the 10 MHz has a standing high bid of $103 million. This is only one example to prove that this spectrum will get even more pricey. One can also look to BC where the price of the Vancouver licence is already about five times more than the entire BC licence in the 2001 spectrum auction.

Auction Day 4: Setting new records in auction haul, no signs of slowing down

News | 06/02/2008 4:08 pm EDT

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